The reasons you, as a trustmaker, create a trust are certainly special and important to you. Still, your intent or purpose for creating a trust can also have significant legal ramifications.
For this reason, it is often critical that a trustmaker express in writing their purpose for creating the trust. There are essentially two different ways of documenting a trust maker’s intent – each has slightly different purposes, and sometimes both are generally called a “statement of intent.” READ MORE
Although purchasing life insurance may seem pretty straightforward, it can be rather complex, especially given the different types of coverage available. Plus, because insurance agents often earn hefty commissions on the policies they sell, it can be challenging to determine precisely how much coverage (and what type of insurance) you need – and who you can trust to give you objective and accurate advice about that coverage.
With this in mind, we’ll break down the common types of life insurance coverage, explain how each of the different kinds works, and outline what you need to know to purchase a policy that will adequately address your needs, objectives, and family situation. While you should always meet with your Personal Family Lawyer® to ensure you get the proper coverage, here are a few of the most important factors to consider when shopping for a life insurance policy. READ MORE
College tuition costs and student loan debt keep going up, so much so that student debt has reached a crisis point. Student loan debt in the United States is approaching $2 trillion and grows six times faster than the national economy. The average annual cost of a private four-year college is more than $32,000 – not including expenses such as housing, food, books, and supplies. Between 2005 and 2020, the average per-student debt level nearly doubled, from $17,000 to $30,000.
Student loan debt is an economic drag, limiting opportunities long after graduation. One of the most popular ways to save for education is a 529 plan, a qualified tuition program. These plans take their name from Section 529 of the Internal Revenue Code, but they are established and maintained at the state level. Every state except Wyoming has a version of the 529 plan. READ MORE
As we head into the third year of the pandemic, we are coming to terms with just how fragile our lives and health are. If you haven’t gotten sick yourself, it’s almost certain you know someone who has, and many of us even know of one or more individuals who have died in the past two years.
Although severe illness and death are always at risk for – and should plan for – the pandemic has forced many of us to face our mortality like no other event in recent memory. Some of those worst-case scenarios we thought would never happen now seem much more likely, and for some people, those unthinkable situations have even become a reality. READ MORE
If your estate plan is based around a living trust, you are probably familiar with the trust’s benefits over a standard will. Avoiding probate, reducing attorney’s fees, and providing privacy for you and your loved ones are the primary benefits of using a living trust.
Ideally, you transfer all your accounts and property into the living trust. At the same time, you are still alive by changing ownership from you as an individual to you as the trustee of the living trust or naming the living trust as the beneficiary of items such as life insurance or a retirement account. The trust, in effect, is a legal entity that is separate from your estate (the money and property you own). Since you create the trust while you are alive and will most likely name yourself as the beneficiary, you will continue to use and enjoy the accounts and property. READ MORE
State laws are also particular about who can serve in specific roles like executor, trustee, or financial power of attorney. In some states, for instance, the executor of your will must either be a family member or an in-law and if not, the person must live in your state. If your chosen executor doesn’t meet those requirements, they cannot serve.
Furthermore, some states require the person you name as your executor to get a bond, like an insurance policy, before they can serve. Such bonds can be challenging to get for someone who has a less-than-stellar credit score. If your executor cannot get a bond, it would be up to the court to appoint your executor, which could end up being someone you would never want managing your assets or a third-party professional who could drain your estate with costly fees. READ MORE
You probably do not keep a ledger of how much each child costs you. You spend as much money as each child requires. Inevitably, there are spending imbalances. Although not perfectly equal in terms of dollar amounts, such an approach can be considered fair because you allocate funds based on need instead of an arbitrary measure such as age.
Fairness involves accounting for the differences among your children. You want to be fair to them in life – and in death. When setting up an estate plan, you are acknowledging the unpleasant possibility – no matter how remote – that you may not be around to care for your minor children while they are growing up. READ MORE
Creating your estate plan using online document services can give you a false sense of security – you think you’ve got estate planning covered when you most likely do not. DIY plans may even lead you to believe that you no longer need to worry about estate planning, causing you to put it off creating a proper plan off until it’s too late.
In this way, relying on DIY estate planning documents is one of the most dangerous choices you can make. In the end, such generic forms could end up costing your family even more money and heartache than if you’d never gotten around to doing any planning at all. READ MORE
A qualified terminable interest property (QTIP) trust is an estate planning tool that married couples can use to minimize uncertainty about the future and maximize certain tax advantages. Since no one can predict how much they will own at the time of their death, which spouse will die first, whether the surviving spouse will remarry, or what the estate tax rate will be when they die, a QTIP trust can help deal with and minimize these uncertainties without the need for a crystal ball.
The most common form of a QTIP trust is a testamentary QTIP, created when the first spouse dies. This QTIP is a marital trust established as part of a married couple’s estate plan to hold money and property for the surviving spouse’s benefit. This trust may be the only one created at the first spouse’s death, or it may be part of a multiple trust arrangement where, after the first spouse’s death, the family trust (or credit shelter trust) receives an amount equal to the federal estate tax exemption and the marital trust gets the rest. READ MORE
Family dynamics are highly complicated and prone to conflict even during the best of times. But when tragedy strikes a household member, even minor tensions and disagreements can explode into bitter conflict. And when access to money (or even quite often, sentimental items of furniture or jewelry) is on the line, the potential for discord is exponentially increased. Ultimately, there is no higher cost to families than the cost of lost relationships after the death or incapacity of a loved one.
By becoming aware of some of the leading causes of conflict over your estate plan, you’re in a better position to prevent those situations through effective planning. Though it’s impossible to predict how your loved ones will react to your estate plan, the following issues are among the most common catalysts for conflict. READ MORE
An important question arises regarding the type of deed that should be used for transferring real property into the trust’s name. Several types of deeds can be used, one of which is a general warranty deed. The other types of deeds commonly used in the United States for transferring property are quitclaim deeds and special warranty deeds. Although a complete discussion of the differences among the types of deeds is not possible in an article of this length, the following information briefly explains each type of deed and why someone might want to use it when transferring ownership of real property.
When someone wants to transfer whatever property rights they have in a parcel of property, they can use a quitclaim deed. When individual drafts and sign a quitclaim deed, they are, in effect, making a statement that whatever they own regarding the property described in the deed is now transferred to the transferee. READ MORE
A common misconception people have about life insurance is that they only need to designate their spouse, child, or loved one as the policy’s beneficiary to ensure that the life insurance benefits will be available to the beneficiary when they die. Life insurance is a significant financial and estate planning tool. Still, there is no guarantee that your beneficiary will receive or keep the benefit from your insurance without certain protections in place.
Despite the estate tax exemption currently being at a historic high, the exemption amount will likely change under the current administration or sunset in 2026 at the latest. Therefore, if you have purchased life insurance, consider taking the extra step to ensure that your loved ones’ financial futures are secure. READ MORE
According to Statista, more than 295 million people in the United States use social media. If you are an avid social media user, have you considered what will happen to your accounts when you die? If you have spent time creating, uploading, and sharing content, it is essential to take a look now at what will happen after you pass away so you can determine your content’s future.
Because the process for each account is different, your loved ones must know what social media accounts you have and what your wishes are for their future after you have passed. By adequately laying out your wishes in your estate plan, you can guide your loved ones and reassurance that your legacy will live on. READ MORE
Incapacity can be a temporary event from which you eventually recover, or it can be the start of a lengthy and costly affair that ultimately ends in your death. Indeed, incapacity can drag out over many years, leaving you and your family in an agonizing limbo. This uncertainty is what makes incapacity planning so incredibly important.
The goal of effective estate planning is to keep your family out of court and out of conflict no matter what happens to you. So if you only plan for your death, you’re leaving your family – and yourself – extremely vulnerable to potentially tragic consequences. READ MORE
The reasons why a trust might terminate can vary. Still, in general, termination occurs because the trust has accomplished its purpose, is no longer economically feasible, has distributed all its property, revoked, or is dissolved by the court because of a dispute or illegality.
A trust is a legal arrangement in which one person (the trustmaker) places their property in a trust and appoints someone (a trustee) to hold title to and manage the trust property for the benefit of one or more people (the beneficiaries). The property placed in a trust can be money, real estate, securities, business interests, insurance policies, and other types of assets. READ MORE